Depleted Transportation Trust Fund Equals Rough Ride for NJ Residents

If Christie and legislators don’t find new source of revenue for the TTF, Garden State drivers may be dodging bigger and deeper potholes

With potholes dropping out up on roadways throughout New Jersey as the weather turns warmer, the future of a state program that helps municipal and county governments maintain thousands of miles of roadways remains rocky.

Gov. Chris Christie and lawmakers in Trenton have yet to strike a deal on a new source of revenue for New Jersey’s Transportation Trust Fund. As a result, state spending on roads, bridges, and rail projects could be scaled back from over $1 billion to $600 million when the state’s new fiscal year begins on July 1.

Local government officials say they have yet to be told how that drop in funding would affect the state-funded programs that help them maintain more than 32,000 miles of roadway, as well as thousands of bridges.

Most mayors and county government leaders are putting their budgets together right now, and those officials say the uncertain future of the state transportation funding makes it harder to do necessary long-term planning.

“It’s not fair to the residents of our state and to the municipalities,” said Hope Mayor Timothy McDonough, who chairs the New Jersey League of Municipalities’ transportation-funding task force.

“It will certainly impact planning and forecasting for these critical transportation projects,” said John Donnadio, executive director of the New Jersey Association of Counties.

To be clear, money from the state Transportation Trust Fund doesn’t go directly to pay for pothole repairs. Patches typically come out of a municipality’s public works’ budget. TTF dollars go to capital projects, like full-scale repaving, which help prevent potholes from forming in the first place.

“It’s definitely related and it’s definitely an issue,” Donnadio said. “The reason that there are pot holes is these roads needs to be repaired or reconstructed.”

Christie’s original vision for state transportation spending under a five-year plan he put forward in 2011 was to use more “pay-as-you-go” funding out of the annual state budget to ease a reliance on new borrowing. New Jersey is one of the most indebted states in the country and has one of the worst bond ratings, which can drive up the cost of borrowing.
But New Jersey’s economy hasn’t grown as quickly coming out of the last recession as Christie once projected, and he’s had to make a number of budget adjustments since taking office in early 2010 to account for missed revenue projections.

'Pay-As-You-Go' goes away

The $32.8 billion state budget in place until June 30 includes none of the nearly $500 million in “pay-as-you-go” funding for transportation that Christie originally planned on having available. And his $33.8 billion budget plan for the fiscal year that begins July 1 is also missing a “pay-as-you-go” component. That lack of a cash element has put a strain on authorized borrowing.

Many believe raising the state’s 14.5-cent gas tax, the current source of revenue for the trust fund, is the likeliest solution going forward. And Christie, a Republican, has yet to rule that out as an option.

New Jersey’s gas tax hasn’t been increased in more than two decades, and it is the second-lowest in the nation. With no increase, beginning July 1, all of the revenue raised from the gas tax will go to paying off only the fund’s debt.

But there are also political considerations in play. The full state Assembly is up for reelection this fall and Republican lawmakers at a recent forum in the State House did not openly embrace the notion that the gas tax should be increased.

Christie is also in the midst of exploring a run for U.S. president in 2016. If lawmakers wait until after the November election this year to approve a gas-tax hike that would raise the issue again just as Christie could be jumping into the GOP presidential primary.

New Jersey voters, meanwhile, also remain unconvinced that a gas-tax hike is the best solution to the state’s transportation-funding issue, according to all recent public opinion polls.

A Rutgers-Eagleton survey conducted last month found 54 percent of state residents opposed hiking the gas tax, with 42 percent in favor. Those results are nearly unchanged since December when Rutgers-Eagleton also polled the issue.

A Monmouth University Polling Institute survey released last month showed 52 percent opposed to hiking the gas tax even if given assurances all of the money raised would go only to road and bridge improvements.
And a Fairleigh Dickinson University PublicMind poll from January found only 28 percent approval for a gas-tax hike.

Still, Forward New Jersey, a coalition of more than 75 different organizations including business groups and labor, has been working for months to raise awareness about the transportation-funding issue. The organization has not endorsed a gas-tax hike as the solution, but has also not been voicing opposition to it.

Cathleen Lewis, a spokeswoman for the New Jersey chapter of the motorist advocacy group AAA, which is one of the organizations in Forward New Jersey, said when most people think of the Transportation Trust Fund they don’t make the link to the pot hole around the corner from their house or on the roadway they take to work. But the two issues are related, she said.

“Absolutely,” she said.

And due to the funding uncertainty Lewis said many governments are being forced to just patch potholes instead of repaving the roads altogether, an approach that can increase long-term costs.

“Because we’ve had to patch and patch and patch, all we’re doing is fixing today’s problem but making tomorrow’s problem worse,” she said.

McDonough, the Hope mayor, said one way or another residents will end up paying for the road projects. If the money doesn’t come from the state through the Transportation Trust Fund, local government officials -- who rely on property taxes to balance their budgets -- will be forced to pick up the slack to make sure roads in a business district remain open and buses can navigate streets safely on their way to school.

“It’s definitely going to be property taxes if it isn’t the TTF,” McDonough said. “There’s a lot at stake here.”